IDEAS home Printed from https://ideas.repec.org/p/hhs/hamisu/2021_001.html
   My bibliography  Save this paper

Action Lab: Integrated Communications on Financial and ESG Performance in the Earnings Call

Author

Listed:
  • Setterberg, Hanna

    (Mistra Center for Sustainable Markets (Misum))

  • Sjöström, Emma

    (Mistra Center for Sustainable Markets (Misum))

Abstract

One of the most important forums for companies to disclose financial information to the market is the quarterly earnings call. Environmental, social and governance (ESG) issues are gaining increased traction among institutional investors but are yet to find a place in the earnings call. We launched the Action Lab project, which was a facilitated process of investor relations and sustainability functions working together to communicate ESG factors in the earnings call setting. Three publicly listed companies committed to work with us in the lead-up to the third quarter 2017 call, when they would include ESG dimensions in their presentations. Five major challenges emerged from our research. First, there is a chicken and egg situation in which companies do not convey ESG information because they think analysts are not interested, and analyst do not ask ESG-related questions because there is no ESG-related information for them to base questions on. Second, it is challenging to quantify ESG factors in ways that fit analysts’ models. Third, the earnings call is a highly ritualized event and there is a reluctance to change the format. Fourth, there is a fear on the company side that ESG issues might be perceived as greenwashing, especially in times of weaker financial performance. Finally, ESG perspectives are typically too long-term to fit the focus of a short-term earnings call, and might therefore be better suited to other forums.

Suggested Citation

  • Setterberg, Hanna & Sjöström, Emma, 2021. "Action Lab: Integrated Communications on Financial and ESG Performance in the Earnings Call," Misum Working Paper Series 2021-1, Stockholm School of Economics, Mistra Center for Sustainable Markets (Misum).
    • Handle: RePEc:hhs:hamisu:2021_001
    as

    Download full text from publisher

    File URL: https://swopec.hhs.se/hamisu/papers/hamisu2021_001.1.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Call, Andrew C. & Sharp, Nathan Y. & Shohfi, Thomas D., 2021. "Which buy-side institutions participate in public earnings conference calls? Implications for capital markets and sell-side coverage," Journal of Corporate Finance, Elsevier, vol. 68(C).
    2. Cen, Ling & Chen, Jing & Dasgupta, Sudipto & Ragunathan, Vanitha, 2021. "Do Analysts and Their Employers Value Access to Management? Evidence from Earnings Conference Call Participation," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 56(3), pages 745-787, May.
    3. Unknown, 2016. "Energy for Sustainable Development," Conference Proceedings 253270, Guru Arjan Dev Institute of Development Studies (IDSAsr).
    4. Brown, Lawrence D. & Call, Andrew C. & Clement, Michael B. & Sharp, Nathan Y., 2019. "Managing the narrative: Investor relations officers and corporate disclosure✰," Journal of Accounting and Economics, Elsevier, vol. 67(1), pages 58-79.
    5. L'industria, 2021. "Call for paper," L'industria, Società editrice il Mulino, issue 3, pages 579-593.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Dzieliński, Michał & Eugster, Florian & Sjöström, Emma & Wagner, Alexander F., 2022. "Climate Talk in Corporate Earnings Calls," Misum Working Paper Series 2022-6, Stockholm School of Economics, Mistra Center for Sustainable Markets (Misum).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. De Franco, Gus & Shohfi, Thomas & Xu, Da & Zhu, Zhiwei (Vivi), 2023. "Fixed income conference calls," Journal of Accounting and Economics, Elsevier, vol. 75(1).
    2. Call, Andrew C. & Emett, Scott A. & Maksymov, Eldar & Sharp, Nathan Y., 2022. "Meet the press: Survey evidence on financial journalists as information intermediaries," Journal of Accounting and Economics, Elsevier, vol. 73(2).
    3. Tim Martens & Christoph J. Sextroh, 2021. "Analyst Coverage Overlaps and Interfirm Information Spillovers," Journal of Accounting Research, Wiley Blackwell, vol. 59(4), pages 1425-1480, September.
    4. Duan, Lini & Li, Lingyi & Park, Kyung-Hye & Wu, Di, 2023. "Muddy the waters to conceal information? Evidence from firms' inconsistent answers during Q&As," Finance Research Letters, Elsevier, vol. 51(C).
    5. Wu, Di & Gao, Shenghao & Chan, Kam C. & Cheng, Xiaoke, 2022. "Do firms strategically respond to retail investors on the online interactive information disclosure platform?," Finance Research Letters, Elsevier, vol. 47(PA).
    6. Villanthenkodath, Muhammed Ashiq & Mahalik, Mantu Kumar, 2021. "Does economic growth respond to electricity consumption asymmetrically in Bangladesh? The implication for environmental sustainability," Energy, Elsevier, vol. 233(C).
    7. Shahbaz, Muhammad & Hoang, Thi Hong Van & Mahalik, Mantu Kumar & Roubaud, David, 2017. "Energy consumption, financial development and economic growth in India: New evidence from a nonlinear and asymmetric analysis," Energy Economics, Elsevier, vol. 63(C), pages 199-212.
    8. Mollik, Sazib & Rashid, M.M. & Hasanuzzaman, M. & Karim, M.E. & Hosenuzzaman, M., 2016. "Prospects, progress, policies, and effects of rural electrification in Bangladesh," Renewable and Sustainable Energy Reviews, Elsevier, vol. 65(C), pages 553-567.
    9. Obsatar Sinaga & Mohd Haizam Mohd Saudi & Djoko Roespinoedji & Mohd Shahril Ahmad Razimi, 2019. "The Dynamic Relationship between Natural Gas and Economic Growth: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 9(3), pages 388-394.
    10. Teng, Meixuan & Burke, Paul J. & Liao, Hua, 2019. "The demand for coal among China's rural households: Estimates of price and income elasticities," Energy Economics, Elsevier, vol. 80(C), pages 928-936.
    11. Ruqayya Ibraheem & Ismat Nasim, 2021. "Globalization, Energy Use and Environmental Degradation in Thailand," iRASD Journal of Energy and Environment, International Research Association for Sustainable Development (iRASD), vol. 2(1), pages 01-11, June.
    12. Ouyang, Yaofu & Li, Peng, 2018. "On the nexus of financial development, economic growth, and energy consumption in China: New perspective from a GMM panel VAR approach," Energy Economics, Elsevier, vol. 71(C), pages 238-252.
    13. Muhammad Shahbaz & Syed Jawad Hussain Shahzad & Mantu Kumar Mahalik & Perry Sadorsky, 2018. "How strong is the causal relationship between globalization and energy consumption in developed economies? A country-specific time-series and panel analysis," Applied Economics, Taylor & Francis Journals, vol. 50(13), pages 1479-1494, March.
    14. Sinha, Avik & Shahbaz, Muhammad, 2018. "Estimation of Environmental Kuznets Curve for CO2 emission: Role of renewable energy generation in India," Renewable Energy, Elsevier, vol. 119(C), pages 703-711.
    15. Miriam Müller & Oscar Reutter, 2017. "Vision Development towards a Sustainable North Rhine-Westphalia 2030 in a Science-Practice-Dialogue," Sustainability, MDPI, vol. 9(7), pages 1-27, June.
    16. Simshauser, P., 2019. "On the impact of government-initiated CfD’s in Australia’s National Electricity Market," Cambridge Working Papers in Economics 1901, Faculty of Economics, University of Cambridge.
    17. Nallapaneni Manoj Kumar & Aneesh A. Chand & Maria Malvoni & Kushal A. Prasad & Kabir A. Mamun & F.R. Islam & Shauhrat S. Chopra, 2020. "Distributed Energy Resources and the Application of AI, IoT, and Blockchain in Smart Grids," Energies, MDPI, vol. 13(21), pages 1-42, November.
    18. Mardones, Cristian, 2021. "Ex-post evaluation and cost-benefit analysis of a heater replacement program implemented in southern Chile," Energy, Elsevier, vol. 227(C).
    19. Pourshab, Nasrin & Tehrani, Mehdi Dadkhah & Toghraie, Davood & Rostami, Sara, 2020. "Application of double glazed façades with horizontal and vertical louvers to increase natural air flow in office buildings," Energy, Elsevier, vol. 200(C).
    20. Abre-Rehmat Qurat-ul-Ann & Faisal Mehmood Mirza, 2021. "Multidimensional Energy Poverty in Pakistan: Empirical Evidence from Household Level Micro Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 155(1), pages 211-258, May.

    More about this item

    Keywords

    earnings call; ESG; integrated communication;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hhs:hamisu:2021_001. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sakthi Suganya Balraj (email available below). General contact details of provider: https://edirc.repec.org/data/hhstose.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.